Sales Forecast Modeling

question 46

Essay

Sales Forecast Modeling. Kerry Weaver, office manager for Pediatric Medicine, Ltd., would like to generate a sales forecast based on the assumption that next year sales are a function of current income, advertising, and advertising by a competing local hospital:
A. Write an equation for predicting sales based on the assumption that the percentage change in sales is three times as large as the percentage change in income and advertising; but only one-fourth as large as, and of the opposite sign of, the percentage change in competitor advertising. Use the symbols S = sales, Y = income, A = advertising, and CA = competitor advertising.
B. During the current year, sales total $1,000,000, local disposable income is $78,750 per household, advertising is $90,000, and competitor advertising is $100,000. Previous period levels were $75,000 (income), $80,000 (advertising), and $125,000 (competitor advertising). Forecast next year sales.

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Definitions:

Perceived Sincerity

The extent to which an audience believes an individual's actions or statements are genuine and not manipulative.

Double-Edged Sword

A situation or decision that has both positive and negative potential outcomes.

Bases of Power

The foundations or sources from which an individual or group derives the ability to influence, control, or command others.

Sources of Power

The origins from which an individual or organization derives the ability to influence or control outcomes.